Income and Expenditure Account Format

Income and Expenditure Account is a nominal account prepared by not-for-profit organisations to ascertain the surplus or deficit of the organisation for the current accounting year. It is prepared at the end of accounting year by debiting all the expenses and losses and crediting all incomes and gains of the concerned year in this account to ascertain the result of either surplus or deficit. Income and Expenditure Account is prepared on accrual basis of accounting and records income and expenses of revenue nature only. 

The surplus or deficit ascertained from the Income and Expenditure Account is transferred to Capital Fund in the Balance Sheet. The difference between the two sides is either surplus( if the total of the credit side is more than the debit side) or deficit( the debit side is more than the credit side), which is added or deducted from Capital Fund in Balance Sheet, as the case may be. Income and Expenditure Account records the non-cash expenditure such as depreciation also.

Income and Expenditure Account is prepared from trial balance when complete sets of books are maintained or from Receipt & Payment a/c when complete sets of books are not maintained by the organisations.

Format of Income and Expenditure Account:

* represents that the Income and Expenditure A/c will either have a Surplus or Deficit balance, i.e., when the income side is greater than the payment side, the difference is denoted as Surplus, and when the payment side is more than the receipt side, the difference is denoted Deficit.